Archive

Prime Minister Peter O’Neill has been vocal in the media recently telling anti-corruption warriors to be patient and wait for the results of an administrative inquiry into the alleged illegal Manumanu land deals – transactions involving millions of kina in state funds and hundreds of hectares of land.

But it has already been ten months since the scandal erupted in the media. It was early February when the Prime Minister promised three investigations, a Commission of Inquiry (later downgraded to an Administrative Inquiry) a police fraud squad investigation and an Ombudsman Commission inquiry.

Now the Prime Minister says the Administrative Inquiry is yet to complete its investigations and the results will be known in an ‘appropriate timeframe’ but given no clue as to what that means.

The National Forest Authority has granted permission for logging in the Collingwood Bay area of Northern Province despite the strong opposition of local people.

This is the third attempt at large-scale commercial logging in the area, the two previous attempts having been successfully defeated through the courts.

It is understood Northern Forest Products Ltd and Aisor Development Corporation have been issued a Forest Clearance Authority (FCA) to log Portions 136, 137 and up to Baruga landsand to the Musa river.

According to the maps seen, its seems the entire Collingwood Bay area is to be consumed by logging under the pretext of planting cocoa.

Local people have been given no information about the proposed logging and have not seen a copy of the FCA proposal, or any approval granted by the National Forest Board or the Forest Minister.

Requests to the Forest Authority for these documents have gone unanswered and local people are totally in the dark as to how the authorities could give approval without even consulting local people and without ensuring their consent.

Meanwhile a company (allegedly involving a Malaysian and some Wanigela landowners) has been landing logging equipment atWanigela since April this year. The equipment is being stored at Naukwat village, a home to one of the people known to have been directly involved in the illegal Collingwood Bay SABL that was declared illegal by the National Court in June 2014.

Collingwood Bay landowners are at a loss to understand the continuing defiance by the National Forest Authority to grant licences for logging concessions in their area despite court rulings after court ruling in favour of the landowners that span nearly 30 years.

There are rumours that the Provincial Government and the Administration are in support of a cocoa project in Collingwood Bay, and it is alleged that the new FCA and movement of logging machineries have their approval?

Questions asked are:

Why have the landowners not been officially made aware of this government sanctioned cocoa project?

Why does the cocoa planting require bulldozers, jinkers and graders, when the landowners need only knives, spades and axes to plant cocoa.

The Baruga landowners have already put up tabu markings stopping anybody moving into their private land.

The National Forest Authority has miserably failed many landowning communities’ in Papua New Guinea over the years and continues to do so in Collingwood Bay through the illegal SABL and now this suspect FCA.

The Collingwood Bay people have held community consultation forums since 2014 and have unanimously agreed to pursuing their own Community Conservation Initiative. This received final community approval in April 2017, and funding support has been secured.

It seems the National Forest Authority is intent on deliberately truncating / DESTROYING the Communities’ Conservation Initiative over 650,000 hectares of land by encouraging logging without the consent of the local people.

I AM OF THE STRONG VIEW THAT IT IS TIME FOR THE ENTIRE COLLINGWOOD BAY COMMUNITIES’ TO CONVERGE AT WANIGELA AND DEMAND AN EXPLANATION FROM THOSE CONCERNED, THE PROVINCIAL GOVERNMENT AND THE ADMINISTRATION, AND THE RESPECTIVE FORESTRY OFFICES IN PORT MORESBY AND POPONDETTA.

Community advocacy group ACT NOW! has launched a petition calling on newly elected MPs to establish an Independent Commission Against Corruption within 100 days.

“Everyone knows corruption is a massive problem in Papua New Guinea”, says Campaign Coordinator, Eddie Tanago. “People are dying unnecessarily every day because of the rampant stealing and the mismanagement it causes.”

“This new petition is urging our newly elected MPs to take responsibility and do something effective by immediately establishing an ICAC,” says Mr Tanago.

ACT NOW! says the 100 day timetable is achievable as all the legislation needed for an ICAC has already been drafted and the necessary Constitutional amendment was passed by Parliament in 2016.

It has been estimated as much as 50% of the government’s annual development budget is stolen every year1 and police have said K1.5 billion went missing in 2016 alone.2 PNG is ranked in the bottom 20% of all countries for corruption by Transparency International.3

“The consequences of this corruption are dire. Vital health and education services starved of money and mismanagement and abuse further impede service delivery. Then there are all the illegal land deals that keep happening and illegal logging”, says Mr Tanago.

“Existing anti-corruption mechanisms have proven to be ineffective and a new body with full powers of investigation and prosecution is urgently needed”.

“In 2012, the incoming government promised to establish an ICAC as a major step in the fight against corruption. But over the next five-years it failed to fulfil that promise. Our new MPs must ensure they do better”.

It also shows how, as Peter O’Neill’s political career reached its crowning peak in 2011, his business empire underwent an astonishing period of growth.

At its height, this empire commanded assets worth in excess of K250 million, although even this figure doesn’t account for any corporate holdings held on trust for O’Neill or held through other proxy shareholdings.

There is nothing necessarily sinister in a business empire, but in a national economy where the state is a major investor and consumer, having a Prime Minister personally possessing significant stakes in key markets, generates fertile ground for conflicts of interest.

Avoiding conflicts of interest is a demand enshrined in the Constitution, Section 27 states a leader must not ‘ place himself in a position in which he has or could have a conflict of interests’ and ‘shall not use his office for personal gain’ or ‘enter into any transaction or engage in any enterprise or activity that might give rise to doubt in the public mind’.

To test how Peter O’Neill matches up to these standards, PNGi has mapped his business empire, through a convoluted web of companies in which he has an explicit stake. In doing so, PNGi has uncovered evidence that O’Neill’s businesses have directly benefited from government contracts and contracts awarded or funded by international financial institutions and foreign governments.

Key findings include:

O’Neill’s business Wild Cat Developments, which he has recently sold, was one of the first to benefit from the construction of the controversial new Western Pacific University, in the Prime Minister’s Pangia-Ialibu electorate.

Wild Cat has also earned significant multi million kina revenues from Asian Development Bank funded projects.

O’Neill used the Prime Minister’s office to patronise a joint-venture he shares with Sir Luciano and Lady Ni Yumei Cragnolini, without seemingly revealing his beneficial interest.

Remington Technology, another company in which the Prime Minister has a substantial stake, has benefited from contracts with state entities, government departments, and Australian government agencies.

Lift Off: Prime Minister, Millionaire also reveals O’Neill owned entities have consistently breached important reporting requirements set out in the Company Act 1997.

These findings raise a series of important technical questions:

Has Peter O’Neill declared all his interests to the Ombudsman Commission and sought special dispensation for his voluminous range of business interests?

Did he recuse himself from any National Executive Council (NEC) decision, which his companies would benefit from, directly or indirectly?

Have the contracts complied with the governance protocols of the relevant International Financial Institutions and foreign government agencies?

The findings also raise some ethical issues:

Is it right for senior political figures to retain large business holdings?

Should a Prime Minister be able to personally profit from decisions made by his government, even where he has recused himself from the decision making process, and declared his assets to the Ombudsman Commission?

PNGi says The Midas Touch is based on months of digitally assisted analysis of several thousand corporate records, hundreds of official documents and media reporting. It comprises three parts:

Sir Mekere, our former Prime Minister, likened corruption to cancer, presumably the malignant type. Sam Koim, former head of Task Force Sweep, described the rising tide of corruption using the boiling frog tale – descriptive but a parable nonetheless as it is scientifically incorrect. But if we focus on the point being made, which is that unless we are alert to the slow and gradual threat of diminishing governance and the growing scale of corruption these can go unnoticed and become accepted as the new norm threatening democracy and our country’s development.

These concerns seem apt when we consider the performance of the last term of Parliament and the Executive Government. The O’Neill Government swept into power on a wave of optimism and promises that it would tackle the problem of corruption and restore good governance. The Alotau Accord captured the commitments made by O’Neill’s Government to the people of PNG of the initiatives it would undertake. There were pledges to “continuing the fight against Corruption by proper funding and institutionalization of the inter-agency committee against corruption in particularly Task Force Sweep. Further, the Government will introduce the Independent Commission Against Corruption (ICAC) Bill.” O’Neill has failed to table the ICAC law in Parliament.

There were also promises to “review the powers, roles and responsibilities of the Ombudsman Commission” as well as to abolish the Department of Personnel Management and to restructure the “Public Service Commission … [by giving it] the Constitutional powers and responsibility to oversee the efficiency of the public service.” There was also to be a shakeup of sub-national governance with “the transfers of powers of appointment of Provincial Administrators to the Provincial Executive Council“. All these have not been done and indeed the O’Neill Government has gone in the reverse direction.

Corruption is the abuse of public office for private gain. Corruption should not only be thought of willful abuse but also if one is aware of it and does nothing to bring it to the attention of appropriate authorities then there is a crime of complicity. It has been a sad trait that the more stakeholders like the private sector especially has not done more to play a more active and stronger coordinated collective role in demanding better public governance.

There are many forms of governance and this article is focused on public governance, which relates to how power and authority is distributed amongst different agents, the processes and mechanisms through which these are exercised and how the rules are enforced. Good governance is an imprecisely defined term but can be thought of as being secured when good development outcomes are achieved with adherence to key principles of voice, accountability, fairness, legitimacy, participation and rule of law. Rule of law is the principle that all institutions and people are subject to and accountable to law, which must be fairly and equally applied or enforced.

The manner in which O’Neill first took the office of the Prime Minister was not legitimate – one of the three arms of Government, the judiciary declared this. This offence should not be lightly forgotten. It is ironic to see that the chief perpetrators of this siege on Executive Government in the last Parliament term are now rattling their sabers on opposing sides in the National General Elections.

By almost any measure there is fault with all governments. It isn’t an easy task pleasing all stakeholders and with this in mind we can restrict an assessment of the O’Neill Government’s governance performance in relation to promises it made itself and to conformance with our laws.

There are three key messages. The first is that the O’Neill Government has not fulfilled the promises it made in relation to good governance. The second takeaway message is that there has been a dismal performance in relation to compliance with rule of law and with legislation around financial governance. The third broad outcome is that there has been a profound erosion in the quality of governance and performance of our public institutions.

Parliamentarians are elected representatives of people but they are not beyond reproach nor are they above the law. Indeed as public officials they are subject to greater scrutiny and accountability, this is embedded in our Constitution through the Leadership Code. The application of the rule of law does not recognize your position only the person.

In the financial governance space, we have seen public debt ratio being willfully breached and then O’Neill and his party members boasting they will borrow more and indebt our nation more. Such taunts are based on fanciful claims it will be for infrastructure spending but we see suggestive evidence that the cost of road infrastructure is excessive, that the scale of infrastructure itself is not in the national interest and the net returns from the investments may be less than other infrastructure investment opportunities outside the capital city. Spending vast sums of money on contracts that raise doubts is hardly an euphemism for inclusive development and good governance.

We have seen the O’Neill Government claim that it has managed public finances well and made necessary adjustments to the budget in years of stress. However, these adjustments have been hidden both from the Parliament and our people until the end of the financial year. The release of regular reports on public finances have been delayed or avoided completely, despite requirements in our laws for this.

For instance, the practice of issuing quarterly reports on warrants, effectively the quarterly cashflow, has ceased. A pillar of good governance is transparency and O’Neill and his government has steadfastly refused to provide information. Our people have the right to demand accountability from our Government and from our public officials. We have a right to understand how scarce public funds are been allocated and spent. We have a right to know if these are extracting the maximum value for our people from these limited funds. We have right to demand accountability in relation to procurement and the award of contracts.

We have seen continued erosion in the quality of our public institutions. Our oversighting agencies continue to be deprived of required funding or legally disempowered and political patronage perhaps influences agency heads to flout their agency’s independence. We have seen the O’Neill Government make legislative changes that strip the Public Service Commission of its powers to ensure a merit-based appointment process and to transfer their powers to a committee of Ministers. This politicization of the civil service is already working to erode the quality of our government institutions. For instance, the Bank of PNG an independent institution by law has breached its mandate by expanding the money supply by funding O’Neill’s budget by K1.8 billion in 2016 alone. Without this funding the Government would have stopped functioning if it had failed to adjust the budget. The Bank of PNG shockingly paid a dividend of K102 million in 2014 when it was technically bankrupt and this was done at the direction of O’Neill and his cabinet of ministers.

So what are pathways forward to combat the scourge of corruption? Let me share my good governance platform, which is summarized in the figure at the top of the page. The new Parliament should act decisively to institute various measures to rebuild our public institutions that can guard against any abuse of executive power. We need public institutions which are a bastion for integrity, professionalism and high standards of ethics so that fundamentally the country can rely on institutions to independently act to ensure good governance prevails. The powers of the Public Service Commission must be restored. We need laws to protect whistler-blowers that step forward to expose corruption and for freedom of information to be enacted. The Police Force must be free from political influence and the Ombudsman Commission must be supported with adequate funding and additional legal powers as required. The ICAC should be established or its proposed functions and powers should be embedded within an existing body like the Ombudsman Commission, if this is sensible.

It is time to consider an Unexplained Wealth Legislation where people that have wealth that is at variance with their declared income are required to justify it or face confiscation of those assets and prosecution under other laws. The new Government can demonstrate its commitment by allowing a phased introduction where this is applied to public leadership positions first.

Corporate governance of our public bodies needs to be strengthened. Requirements for directors of boards to satisfy strong fit and proper test must be satisfied and I want the removal of all legal provisions that allow Cabinet to be shadow directors. Statutory agency heads should be accountable solely to Boards of Directors, which should have the power to hire and fire them.

Public procurement needs to be reformed. The removal of certain public officials, like the State Solicitor, from the tenders board is necessary to avoid conflict of interests. I advocate that a probity auditor for procurement be established. This can be housed within another agency such as ICAC or as a new independent office. This function will ensure that disputes are promptly heard but also investigate any allegations of malfeasance or to simply verify costings are reasonable and robust.

I believe that fiscal transparency must be strengthened by publishing key details of major project including estimated rates of return, estimated and final project costs, contractor and its gender impact. We have seen too many reports of excessive legal costs and it is time to ensure that there is legal compliance of the engagement of lawyers for public purposes through a procurement process that results in panel selection of firms and ensures value for money.

The publicity of Parliamentarians on signage of public works or assets purchased with public funds and the deception that Parliamentarians alone deliver must stop. It is time for anti-signage provisions in law. Finally, Parliament, an important arm of government must be strengthened to provide oversight of executive government.

The challenge of curtailing the corrosive culture of corruption and instilling good governance is the ultimate leadership challenge. In the Alotau Accord the O’Neill Government promised that it would “be remembered … as the most decisive, action packed, transparent and accountable Government the nation has ever had”. Sadly, it seems the O’Neill Government will be remembered instead for the slow but devastating erosion in good governance and poor development outcomes.

POLICE claim that more than K1.5 billion in public funds went missing last year due to fraud-related activities.
National Fraud Anti-Corruption Directorate director Chief Superintendent Matthew Damaru, pictured, made the claim on Friday following the launching of Transparency International Papua New Guinea’s Advocacy and Legal Advice Centre.
“Because people are not making it their business to stand up against fraud and corruption, big (amounts) are lost,” the chief superintendent said.
Damaru said people tended to think that fighting corruption was a job only for the police, the Ombudsman Commission and other stakeholders.
“Having not enough information slows down an investigation,” he said.
“Corruption will affect us in one way or another.
“So we are all responsible to fight it.”
The centre will provide legal advice and recommend referral pathways for people who have corruption-related complaints.
TIPNG’s toll free numbers are 1806000 and 7614636 to receive complaints.